A company’s first weekly pay period of the year ends on January 8. Sales employees earned $30,000 and office employees earned $20,000 in salaries. The employees are to have withheld from their salaries FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $9,000 of federal income taxes, $2,000 of medical insurance deductions, and $1,000 of pension contributions. No employee earned more than $7,000 in the first pay period. Part 1. Compute FICA Social Security taxes payable and FICA Medicare taxes payable. Prepare the journal entry to record the company’s January 8 (employee) payroll expenses and liabilities. Part 2. Prepare the journal entry to record the company’s (employer) payroll taxes resulting from the January 8 payroll. Its state unemployment tax rate is 5.4% on the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.
A company’s first weekly pay period of the year ends on January 8. Sales employees earned $30,000 and
office employees earned $20,000 in salaries. The employees are to have withheld from their salaries FICA
Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $9,000 of federal income
taxes, $2,000 of medical insurance deductions, and $1,000 of pension contributions. No employee
earned more than $7,000 in the first pay period.
Part 1. Compute FICA Social Security taxes payable and FICA Medicare taxes payable. Prepare the
entry
Part 2. Prepare the journal entry to record the company’s (employer) payroll taxes resulting from the
January 8 payroll. Its state
federal unemployment tax rate is 0.6%.
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